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Notes Concerning the Incorporation and Licensing of an Insurance Company in Ontario

These notes are intended to provide information to insurers seeking incorporation and/or a licence to undertake the business of insurance in the province of Ontario. All insurers, regardless of where they have been incorporated, must be licensed under the Ontario Insurance Act, R.S.O. 1990, c.I.8, in order to transact insurance in Ontario.

All corporate applicants for a licence to transact insurance in Ontario must fall under one of the following three categories:


  1. An insurer that is incorporated in Ontario under the Corporations Act, R.S.O. 1990, c.C.38;
  2. An insurer that has been registered under the federal Insurance Companies Act 1991, c.47. This would include any federally incorporated company as well as any foreign insurer (Marine specialists excepted) that is seeking to transact Canadian insurance business;
  3. An insurer that has been incorporated under the laws of another Canadian province.

It is expected that insurers will review the Insurance Act, Compulsory Automobile Insurance Act,  related Regulations and any other requirements set by the Superintendent of Financial Services in detail to ensure that their licence application meets with all regulatory requirements in Ontario.



I. Preliminary Documents Required - Business Plan


All applicants for a licence to undertake the business of insurance in the province of Ontario must submit a comprehensive business plan to the Superintendent of Financial Services.

The objective of a business plan is to show how the business will be conducted and the feasibility of that proposed business.

In the case of Ontario incorporated insurers, the name of the proposed company should be cleared with both the Superintendent of Financial Services and the Ministry of Government Services. For all applicants, the location of the head office should also be indicated along with an address where the insurer is to have its head office or chief place of business in Ontario.

We expect each business plan to be clear and complete. We strongly encourage applicants to seek professional assistance in the development and finalization of their business plan. The business plan must be reasonably detailed and specific containing the following:

1.1. A five year financial forecast, which must be presented according to the directives contained in the guidelines published by the Canadian Institute of Chartered Accountants. An income statement, a statement of retained earnings and a balance sheet must be included in the forecast. The promoters should refer to the P&C 1 Standard Form for Property and Casualty companies and OSFI 54 for Life Insurance companies and include the same elements in the forecast.

1.2. All key assumptions in support of the financial forecast, sources and references utilized in developing the forecast, and the name(s) and address(es) of any actuary and/or other persons involved in preparing the forecast must be disclosed.

1.3. Method of operations in the province of Ontario, including a summary of key functions such as underwriting and claims administration and details of how policyholders and claimants will be served in Ontario.

1.4. The insurer's anticipated business mix, including the classes of insurance for which the insurer plans to apply pursuant to the Superintendent of Financial Services Order issued April 30, 2007.

1.5. Distribution system(s) which the company plans to utilize to market its products to the customers, including recruiting of agents/brokers, sales methods and copies of proposed agent's contracts.

1.6. Reinsurance policies and practices, including gross and net retention. Details concerning the reinsurance market in which the insurer anticipates ceding its business is required.

1.7. A proposal with respect to available management personnel, recruiting and training policies, including actuarial services.

1.8 Capital Requirements: A proposal detailing the company's authorized capital, the par value thereof, and the amount to be subscribed and paid up. In the case of Ontario incorporated insurers, details concerning the subscription of shares and par values can be found in section 143 of the Corporations Act. The amount of subscribed stock and the amount to be paid up before a licence is granted under sections 48(1) and 48(2) of the Insurance Act is largely determined by the specifics of the business plan. The company's capital requirements will generally be considered in the context of a competitive market place where the minimum federal capital requirements are presently set at $5,000,000. The amounts set out below are only the statutory minimum amounts permissible under the Insurance Act. The Superintendent may determine such greater amount as may be required in the circumstances.

Ontario Statutory Minimum Capital Requirements

A: $2,000,000 for joint stock insurance companies applying for a licence to transact life insurance.

B: $3,000,000 for joint stock companies applying for a licence to transact any insurance other than life insurance.

Following the submission of the business plan, the insurer may need to meet with the Senior Registration Specialist to discuss their proposal in further detail. In general, outstanding business plan issues should be resolved before proceeding to the final stages of the application.




II. Incorporation of a New Company


This section applies only to applicants seeking incorporation in Ontario under the Corporations Act.

After reviewing the business plan with the Senior Registration Specialist, the principal promoters for incorporation must:

2.1. Pursuant to Section 142(3) of the Corporations Act, applicants for incorporation are required to give one month's written notice to the Superintendent of Financial Services of their intention to apply for incorporation.

2.2. Publish in four consecutive issues of The Ontario Gazette and once a week for four consecutive weeks in a newspaper published in the city where the head office of the company is to be located, notice of their intention to apply for incorporation (Section 142(2) of the Corporations Act).

2.3. Contact the Ministry of Government Services for precedents and requirements regarding the submission of an application for Letters Patent of incorporation under the Corporations Act.

Applicants must note that Section 48 of the Insurance Act places significant restrictions on insurers who wish to undertake both life and property/casualty business. Therefore, we encourage insurers to limit the objects of the company to the undertaking of either:

(a) Life and Accident and Sickness insurance business; or

(b) Other than life insurance business for the classes for which a company may be licensed under the Insurance Act.

2.4. The proposed by-laws of the company must be forwarded to the Superintendent of Financial Services for a review. If the company intends to issue any redeemable preference shares, it must be stipulated in the Supplementary Letters Patent or By-Law and share certificate that such shares are redeemable only with the consent of the Superintendent of Financial Services. Section 209 of the Corporations Act prescribes the qualifications of Directors.

2.5. A sworn statement setting forth the several sums of money paid in connection with the incorporation and organization of the company, together with any unpaid liabilities thus incurred, as outlined in section 52(1) of the Insurance Act.

2.6. A certified copy of the form of subscription for shares to be used by subscribers.

2.7. List of shareholders showing amounts subscribed and paid in.

2.8. Satisfy the Superintendent that the applicant has met all requirements of the Insurance Act and the Corporations Act regarding subscriptions and payment of shares and election of directors, as outlined in section 52(3) of the Insurance Act.




III. Licensing of the New Company


All insurers incorporated in Ontario and insurers registered under the federal Insurance Companies Act (Canada) or incorporated under the laws of another Canadian province must file an application for licence with the Superintendent of Financial Services with the following documents:

3.1. Documents Required for Licensing

3.1.1. An Application for Licence, duly completed and signed.

3.1.2. Pursuant to section 49 of the Insurance Act, notice of application for a licence should appear in four consecutive issues of The Ontario Gazette and once a week for four consecutive weeks in a newspaper published in the city where the principal place of Ontario business for the insurer is located. Duly certified evidence of such publication must be attached to the application.

3.1.3. A certified copy of Certificate of Registration, Letters Patent, licence or other certificate issued to the corporation by a Superintendent of Insurance, Insurance Commissioner or other competent federal, provincial or foreign authorities of the Province, State or country in which the corporation was incorporated, with a certificate evidencing any deposit the corporation has with the said authorities.

3.1.4. A certified copy of Instrument of Incorporation and by-laws, amended to date.

3.1.5. A certified copy of the Balance Sheet, with the auditor's report thereon.

3.1.6. Copies of all policy forms, endorsements and rates in accordance with the various Regulation and forms of application proposed for use in Ontario. Please note that the issuance of the Ontario licence will not be withheld until such documents are filed. The insurer however must undertake in writing to file such policies and applications at least thirty days before such forms are brought into use in Ontario.

3.1.7. The name in full, domicile and occupations of the directors, officers and major shareholders, along with personal biographical questionnaires to be completed and signed by each promoter and/or officer or Directors and principal shareholder of the company.

3.1.8. Pursuant to Section 54 of the Insurance Act, where the head office of the insurer is located out of Ontario, the insurer must file a duly completed Power of Attorney appointing a Chief Agent resident in Ontario. A precedent will be supplied on request.

3.1.9 The licence fee of $4,000 where Ontario is the primary regulator (i.e. for a provincially incorporated insurance company).




IV. Timing for Licensing a New Company


4.1. This Office requires 30 to 60 days to review a duly completed and perfected application for licence. Please note that the 30 to 60 days begins after all issues arising from draft business plan/documents have been resolved.

4.2. Applicants must not undertake any commitments and/or activities which would represent doing business without a licence based on an anticipated start-up date in Ontario. Such activities would include solicitation of the sale of insurance and insurance promotion.

4.3. Applicants undertaking the business of insurance, as defined in Section 39 without holding a licence, as required by the Insurance Act, are guilty of an offence.




V. Additional Information


5.1. Business proposals, Applications for Licensing and general inquiries should be directed to:

Financial Services Commission of Ontario
Licensing & Market Conduct Division
Licensing Approvals Unit

5160 Yonge Street
4th Floor, P.O. Box 85
Toronto, Ontario
M2N 6L9

Tel: (416) 250-7250
5.2. Copies of the Insurance Act and the Corporations Act can be obtained from the following address:

Publications Ontario Bookstore
880 Bay Street
Toronto, Ontario
M7A 1N8

Tel: (416) 326-5300
Toll-free: 1-800-668-9938


You can also access the Insurance Act, Regulations and the Corporations Act on-line.

Attached below is the CCIR Harmonized Application Form.


Application for Insurer’s Licence as posted on the website of the Canadian Council of Insurance Regulators (CCIR) [New Window]